On the heels of Halloween, as employers turn to preparing for the roll-out of new policies or handbooks in the new year, it’s worth considering how employees might go about acknowledging receipt and understanding of said policies or handbooks. Many employers rely on electronic signatures (often called e-signatures) to memorialize not only these policy acknowledgments but also a whole host of other things, from onboarding documents to arbitration contracts to restrictive covenants to severance agreements. The convenience of e-signatures can be great, but too loose of an e-sign process can expose employers to headaches down the line. Luckily there are a few best practices that can mitigate these concerns:
Explicitly Agree to E-Signatures
The Uniform Electronic Transactions Act (UETA), adopted by 49 states (New York being the outlier with its own analogous version), generally gives electronic signatures the same validity as handwritten ones where both parties agree to use electronic signatures. At the federal level, the Electronic Signatures in Global and National Commerce Act (E-SIGN) similarly allows for valid e-signatures. While an agreement to use electronic signatures can be inferred from context, it behooves employers to put that agreement in writing in the document itself, such as with a provision that the document may be executed by electronic signatures, which the parties agree shall have the full force and effect as manual signatures. This type of language can both reflect compliance with e-signature laws and prevent employees’ later claims that they wouldn’t have agreed to an e-signature.
Avoid Ambiguity Around Electronic Communications Creating “Contracts”
The fact that e-signatures can be just as valid as handwritten ones sometimes introduces unintended consequences. For example, could an employee’s signature block on a reply email memorialize an “agreement” to discussions about compensation or other terms that the employer only intended to be hypothetical or up for negotiation? Courts have reached different conclusions on whether e-mails (or even a series of text messages) created a binding contract under varying circumstances. To avoid such risk, employers should consider using conditional and disclaiming language in emails or text messages as needed. For example, employers can explain that they will only execute a separate agreement in a certain manner; describe any pre-conditions to the future memorialization of terms; and make clear that they do not intend to be bound by email or text communications. In addition, having a written policy that only certain high-level executives have authority to bind the company may be useful to the extent employees claim that emails or texts with unauthorized supervisors created contractual obligations.
Protect Against the “It Wasn’t Me” (Maybe It Was Casper?) Argument
The e-signature process can create questions of whether an employee did in fact personally e-sign the document at issue. Courts have faced variations on the argument that “it wasn’t me” and “I’ve never seen this document before” in the e-signature context. Employers can proactively best position themselves to handle such claims by implementing measures that clearly connect the employee to the e-signature, such as: having employees access and sign documents through an individualized link or with a unique ID or password that the employer cannot change or access; getting written follow-up confirmation that the employee e-signed the document, or at least sending a confirmatory email providing copies of the e-signed documents; ensuring that a date and IP address are digitally recorded in the document being signed; and developing an e-signature policy to ensure consistency across documents.
Bottom line, please (imaginarily) e-sign here: I have read and understand this perspective, will proceed with caution and clarity when using e-signatures at work, and will contact my employment counsel with any questions.
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